Correlation Between Ferguson Plc and Batm Advanced

Can any of the company-specific risk be diversified away by investing in both Ferguson Plc and Batm Advanced at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ferguson Plc and Batm Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ferguson Plc and Batm Advanced Communications, you can compare the effects of market volatilities on Ferguson Plc and Batm Advanced and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ferguson Plc with a short position of Batm Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferguson Plc and Batm Advanced.

Diversification Opportunities for Ferguson Plc and Batm Advanced

0.47

Correlation Coefficient

Ferguson Plc  Batm Advanced

Very weak diversification

The 3 months correlation between Ferguson and Batm is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ferguson Plc and Batm Advanced Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batm Advanced Commun and Ferguson Plc is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ferguson Plc are associated (or correlated) with Batm Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batm Advanced Commun has no effect on the direction of Ferguson Plc i.e., Ferguson Plc and Batm Advanced go up and down completely randomly.

Pair Corralation between Ferguson Plc and Batm Advanced

Assuming the 90 days trading horizon Ferguson Plc is expected to generate 0.92 times more return on investment than Batm Advanced. However, Ferguson Plc is 1.09 times less risky than Batm Advanced. It trades about 0.22 of its potential returns per unit of risk. Batm Advanced Communications is currently generating about 0.09 per unit of risk. If you would invest  1,208,312  in Ferguson Plc on April 20, 2025 and sell it today you would earn a total of  449,688  from holding Ferguson Plc or generate 37.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Ferguson Plc  vs.  Batm Advanced Communications

Ferguson Plc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ferguson Plc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ferguson Plc unveiled solid returns over the last few months and may actually be approaching a breakup point.

Batm Advanced Commun

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Batm Advanced Communications are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Batm Advanced exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ferguson Plc and Batm Advanced

The main advantage of trading using opposite Ferguson Plc and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferguson Plc position performs unexpectedly, Batm Advanced can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Batm Advanced will offset losses from the drop in Batm Advanced's long position.

The idea behind Ferguson Plc and Batm Advanced Communications pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.